Episode Transcript

Auto-generated transcript: New Insights Into Embezzlement April 2020

You are listening to the dental practice owner's podcast. Brought to you by Prosperident. From our unique perspective, as dentistrys and bezel-it experts, Prosperident's team can bring you the information that is important to practice owners. The dental practice owner's podcast brings you strategies, tools, and tips that you can use, and dentistry's thought leaders as guests.

So sit back, relax, and listen to Prosperident's Amber Weber, Wendy Askins, and David Harris. Talk about the issues that matter to you. We would like to welcome everybody to our Prosperident Power Hour. My name is Amber Weber, and I am a senior fraud examiner with Prosperident. I spent 13 years of the dental hygienist in office manager, and then I was fortunate to meet David and become a team member with Prosperident. My, our other host today, our Dave Harris.

He is our CEO of Prosperident, and I'd like to introduce everybody to Wendy Askins. He is a supervising examiner. Wendy has been a great mentor for me, and I've learned a lot from her. So Wendy, if you could please introduce yourself to everybody, that would be great, so we could everyone could get to know you. Oh, thanks, Amber. How many from Texas everyone? I've been with Prosperident for eight years, and I've been in the dental industry for about 30 years.

And it's been such a rewarding career. I've met amazing people, and I'm so happy to be joined up with Prosperident, and be able to fight crime every single day. Excellent. Thank you. Wendy, and we were so happy to have you. And we're so appreciative of everybody joining us today for our Prosperident Power Hour. Our CEO, Dave Harris, we'd like to hear from you about today's webinar. Good to be here. Anyway, Amber, if you're ready, I'm ready. Let's get going. Some things discussed here for security issues.

We won't be talking about certain things for that, but we're happy to have private discussions with you. So you will get our contact information at the end of the webinar, so we have specific concerns that we cannot assess here. Please feel free to contact us. So if that any other questions about that, just let us know. We'll be here to answer for you. We'll talk about a few myths. These are myths about imbezzlement that have been around for a long time and won't go away, but I want to deal with them head on.

The first one is that my accountant is protecting me from imbezzlement. Sometimes what dentists in their advisors don't realize is how narrow the accountants window really is into their practice. Picture a conversation that I could have with my accountant. I go to my accountant and I say, Mark, I'm really excited because I'm going to start this new business. And Mark, my accountant says, David, that's great. Tell me about it. And I say, well, I have this really great idea. I'm going to actually use two different pieces of software. One piece is going to track my revenue and a totally separate piece of software is going to track my expenses.

And Mark, here's the best part of all. They're not going to talk to each other. Mark would say to me, David, that's the stupidest idea I ever heard. I mean, there's no way that would work. And yet, I just described every one of your practices. Dentists use practice management software to track their revenue. They use quite books or some kind of accounting software to track their expenses. And these two, in general, do not hook up. When your accountant looks at your world, typically they're looking at the expense side,

in other words, quick books. And in the way that accounting works in the U.S. in particular, they really don't need to look at the revenue side at all. They can work from your bank account. So most accountants are not looking at your practice management software, most of the time. And that means that the chance of them finding investment, which typically takes place on the revenue side is pretty small.

I'll give you some statistics on this. When we look at embezzlement globally, accountants find about 30% of it. When we narrow our focus to dentistry, that number goes down to about 9%. So your accountant does certain procedures. If you're dealing with a dental CPA, they probably are a little bit better equipped than in generic CPA, but it's still not all that likely that what they do is going to find investment.

Here's the other myth. You know, I have really good systems in place. I have checks and balances and that's going to protect me from embezzlement. I was doing a webinar for a group the other day. And I said, the way you have to view this stuff is it's kind of like playing poker with somebody, but your cards are face up and there's art. Your staff know exactly what your systems are,

what you look at, and more importantly, what you don't. And for a thief, embezzlement is really a crime of navigation, and it involves navigating around the scrutiny that you've put in place. Let's also understand that if I'm a thief, and I want to steal from you, and the first way that I think of to do that is blocked by you, that doesn't send me home to join the church choir, it simply makes me an un-requited thief,

and I need to look for some other way to do it, and chances are pretty good I'll find it. I think I hear a lot from practitioners is, I don't take in that much cash anyway, therefore I'm not vulnerable to being stolen from. And I'll say a couple of things. First of all, I think COVID is the perfect excuse for a lot of practices to stop taking cash.

In other words, this is a great time when you reopen to say to your patient community for the safety of our staff and our patients, we're no longer accepting cash. And it gets rid of a major headache. You know, one of the real sources of annoyance and administration of the front desk. So I think that's something that a lot of practices

should be thinking about right now and possibly emblemating, and it would be fine to do as long as it's communicated in advance. In other words, you don't want to be having that conversation when something... be standing in front of one of your receptions trying to pay their bill. Having said all that, it's not that hard for thieves to steal checks with your name on them to adulterate credit card payments or even to interfere with what are sometimes

called EF to your ACH. EF to his electronic funds transfer to your bank account. You should know that thieves can steal any form of wealth transfer to you. So let's not fall into the trap of thinking, you know, there's not much cash that comes in here and therefore I'm not vulnerable. The other myth is that every piece of software will print some kind of day and report and if that report agrees with the amount of money going in my bank, I must be safe. No, it's not hard to teach software to lie.

That's another conversation we're not going to have in a public forum, but we see it on pretty much a daily basis. The final myth, and I hear there's